Transfer stack in slot 1.7.10

Hi,

Could somebody please explain what the Transferstackinslot method does?

Because I cannot put fuel in my fuel slot when shift clicking.

I also can't place items in the output slot with dragging, but I can when I shift click.

TransferStackInSlot:

http://pastebin.com/MPSVUcNx

Especially this code I do not understand well:

if (!this.mergeItemStack(itemstack1, 3, 39, true))

Thanks.